Does Homeownership Hinder Labor Market Activity? Evidence from Housing Privatization and Restitution

40 Pages Posted: 9 Jul 2022

See all articles by Štěpán Mikula

Štěpán Mikula

Department of Economics, Masaryk University

Josef Montag

Charles University

Abstract

We study whether homeownership hinders labor force participation and increases unemployment. Using a unique dataset from the city of Brno, Czech Republic, we exploit housing reforms that followed the Velvet Revolution, and the subsequent fall of communism, as a source of exogenous assignment of homeownership. Across several estimation approaches, we do not find any evidence of homeownership hindering labor market activity. The estimated effects on labor force participation are around zero and our estimates for unemployment suggest that homeownership reduces it by four to six percentage points. Homeownership thus appears to benefit labor market perfomance.

Keywords: homeownership, labor force participation, unemployment, housing privatization, housing restitution

Suggested Citation

Mikula, Štěpán and Montag, Josef, Does Homeownership Hinder Labor Market Activity? Evidence from Housing Privatization and Restitution. Available at SSRN: https://ssrn.com/abstract=4158633

Štěpán Mikula (Contact Author)

Department of Economics, Masaryk University ( email )

Lipova 41a
Brno, 60200
Czech Republic
11640 (Fax)

Josef Montag

Charles University ( email )

U Knize 8
Prague, 15800
Czech Republic

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